Internal Control Activities Within the Payroll Process, Identified as Adequate

question 12

Multiple Choice

Internal control activities within the payroll process, identified as adequate records and documents, would include which of the following?

• A)Manager approval of payroll prior to signing checks
• B)Independent paymaster
• C)Physical controls in areas where cash and paychecks are held
• D)Paychecks are prepared on prenumbered checks

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Definitions:

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product.

Indirect Materials

Materials used in the production process that cannot be directly linked to a specific product, such as lubricants and cleaning supplies used on machinery.

Manufacturing Overhead

All indirect costs associated with manufacturing a product, such as utilities, rent, and salaries for employees not directly involved in production.

T-Accounts

A simplified accounting tool that represents a ledger account and is used to understand the effects of transactions on account balances.